TelexMOB Review: Shameless TelexFree reload scheme

There is no information on the TelexMOB website indicating who owns or runs the business.
The TelexMOB website domain (“telexmob.com”) was registered on the 2nd of March 2015, however the domain registration is set to private.
The TelexMOB website does have an “about us” section, but no specific details of the company’s ownership or management structure are provided: 

Group of Investors and market analysts, who believe in a highly profitable market. The market Advertising and Technology gradually increases and already a worldwide trend. We are returning to once again make a difference in Multilevel Marketing.
Our Facilities are scattered in various world countries, so as to bring the security that everyone wants.
The TelexMob, begins operations in several countries, showing once again its market strength.

And if you’re wondering what the “comeback” theme is all about, it’s because TelexMOB aims to identify itself with TelexFree.
From the logo, the name of the opportunity, affiliate membership labels and marketing copy present on the website, the owner(s) of TelexMOB are clearly targeting those who lost money in TelexFree.
TelexFree was a $1.8 billion dollar Ponzi scheme shut down by Brazilian authorities in 2013, with the SEC shutting down their global operations in 2014. Hence the line: “Our Facilities are scattered in various world countries, so as to bring the security that everyone wants.”
The implication obviously being that TelexMOB believe they are safe from regulatory action.
Why would they feel the need to make such reassurances?
Read on for a full review of the TelexMOB MLM business opportunity.

The TelexMOB Product Line

TelexMOB has no retailable products or services, with affiliates only able to market affiliate membership to the company itself ($60-$1250).
There is brief mention of advertising in the TelexMOB compensation plan, however this doesn’t appear to have anything to do with the MLM opportunity.

The TelexMOB Compensation Plan

The TelexMOB compensation plan sees affiliate sign up and invest in an affiliate membership. This is done on the expectation of an advertised weekly ROI, with affiliates also paid to recruit new affiliates into the scheme.

Commission Qualification

In order to qualify for commissions, all TelexMOB affiliates must spam the internet daily.
This is achieved via the TelexMOB affiliate backoffice, through which the company supplies affiliates pre-written advertisements to spam with.

Recruitment Commissions

TelexMOB affiliates are paid to recruit new affiliates.
How much of a commission is paid out depends on how much a newly recruited affiliate spends on their affiliate membership:

• Start ($60) – $15
• AdCentral ($220) – $30
• Advanced ($750) – $60
• AdFamily ($1250) – $120

Although not explicitly clarified in TelexMOB’s compensation plan material, I believe an affiliate cannot earn a higher recruitment commission then at the level they themselves bought in at.
Eg. If an AdCentral affiliate recruits an AdFamily affiliate, they are still only paid $30. The only way to earn $120 is to pay the fee to become an AdFamily affiliate first.

Binary Commissions

Residual commissions in TelexMOB are paid out using a binary compensation structure.
A binary compensation structure places an affiliate at the top of a binary team, split into two sides (left and right):

These teams are made up of recruited affiliates, with points tracked between the two sides.
Points are accumulated via affiliate recruitment, with each affiliate membership having a specific point amount attached to it:

• Start – 75 points
• AdCentral – 150 points
• Advanced – 300 points
• AdFamily – 600 points

At the end of each day, TelexMOB tally the points generated by both sides of the team. A percentage commission is then paid out on the points generated by the lesser team.
For the purpose of commission calculation, each points is worth $1.
How much of a percentage of the lesser side’s points is paid out, is determined by how much a TelexMOB affiliate spends on their membership:

• Start – 10% (capped at 2000 points or $200 a day)
• AdCentral – 20% (capped at 10,000 points or $2000 a day)
• Advanced – 30% (capped at 20,000 points or $6000 a day)
• AdFamily – 50% (capped at 20,000 points or $10,000 a day)

Binary Bonus

If a TelexMOB affiliate’s lesser binary team generates at least 4000 points a day for a minimum 20 days in a month, they qualify for a share in 1% of the company’s total revenues for that month.

Unilevel Commissions

Residuals commissions are paid out on the binary earnings of affiliates using a unilevel compensation structure.
A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1):

In turn, if any of these level 1 affiliates go on to recruit new affiliates, they are then placed on level 2 of the original affiliate’s unilevel team.
If any level 2 affiliates go on to recruit new affiliates, they are placed on level 3 and so on and so forth down a theoretical infinite number of levels.
TelexMOB cap payable unilevels at six, paying out 2% of the binary commissions earned by all affiliates in a unilevel team.

Weekly ROI

Starting at the ADCentral affiliate level, TelexMOB pay affiliates the following weekly ROIs:

• AdCentral – $20 a week
• Advanced – $50 a week
• AdFamily – $120 a week

There is no maturity period for these ROIs specified in the TelexMOB compensation plan.
TelexFree paid out their ROIs for 12 months, so presumably this is the same contract length TelexMOB are using.

Team Builder Bonus

If a TelexMOB affiliate recruits at least 10 AdFamily affiliates within 60 days of joining the company, they qualify for a share in 2% of TelexMOB’s company-wide revenue.
This share pays out monthly until a balance of $39,000 has been paid out or 12 months has passed, whichever occurs first.

Joining TelexMOB

Affiliate membership with TelexMOB is tied into the purchase of one of their affiliate memberships:

• Start – $60
• AdCentral – $220
• Advanced – $750
• AdFamily – $1270

An additional monthly $60 “activation” fee applies, irrespective of which level an affiliate signs up with.

Conclusion

Whereas TelexFree attached itself to an irrelevant VOIP offering, TelexMOB have substituted in advertising.
As with TelexFree, TelexMOB’s advertising ruse has nothing to do with revenue generation, which is entirely pegged to affiliates signing up and paying their affiliate fees.
In addition to getting paid to recruit new affiliates (pyramid scheme), the inclusion of weekly ROI payments renders TelexMOB’s affiliate positions securities.
Affiliates pay between $220 to $1270 on the expectation of an advertised weekly ROI.
The rest of the commissions offered by TelexMOB serve only as recruitment incentives, as new affiliate investment is the lifeblood of the scheme.
As with all Ponzi schemes, once new affiliate investment (in membership) dries up, TelexMOB will find itself unable to meet it’s weekly ROI obligations.
That is of course if regulators don’t intervene and shut them down first.
Currently the TelexMOB website appears to be in an embryonic stage. If the scheme catches on, considering the use of TelexFree’s logo, terminology and premeditated targeting of victims of the scheme, don’t expect this to fly under the regulatory radar for too long.
Those who lost money in TelexFree would be well-advised to learn from their mistakes, rather than set themselves up to lose even more money to the person(s) unknown running TelexMOB.

Read More

Massachusetts Sec Div investigating EmGoldex

One of the more prominent reload scams to rise to prominence after the TelexFree shutdown was EmGoldex.
Shrouded in mystery, the company operates your typical European-based gold Ponzi/pyramid hybrid scam. Affiliate investors buy matrix positions for 540 EUR a pop, and once enough new positions have been purchased (by existing and recruited affiliates), a ROI commission is paid out.
Now, from the guys who brought you TelexFree is a billion dollar Ponzi scheme, comes the announcement that EmGoldex is being investigated.
As is common with ongoing regulatory investigations, at this stage details are sketchy:
Secretary of State William F. Galvin’s office is investigating the Andover operation of Emgoldex Team USA Inc., a company that recruits investors to buy gold online and pays bonuses for referring friends and acquaintances. 
The state Securities Division “has an open investigation and is actively looking at the issuer and individuals associated with it,’’ said Brian McNiff, a spokesman for Galvin. He declined to provide details of the probe.
Who exactly runs EmGoldex is a bit of a mystery, with the company claiming on their website to be run out of the UAE:

The Emgoldex Trade Dmcc is registered in a certified free economic zone Dubai Multi Commodities Centre – DMCC. 
The Emgoldex Trade Dmcc company is registered and obtains the licence in the free economic zone Dubai Multi Commodities Center for trade in Gold and Precious Metals all over the world. The company operates with the maximum profit for its customers.
If anyone’s going to get to the bottom of the scheme though, Galvin’s a good a candidate as any. Seeking to reverse the “Brazilian scam capital of the US” reputation TelexFree bestowed upon Massachusetts, Galvin is.
Meanwhile local promoters of EmGoldex, based in the Massachusetts town of Andover, have gone underground.

Emgoldex filed incorporation papers in Massachusetts in June, calling itself a training center. But online links and Facebook pages describe a business paying individuals large returns for buying gold and signing up others to participate. 
Online literature promises a payout of $8,000 to people who spend $800 on gold with the company.
No one answered the phone at the company’s Andover office this week and two of the cofounders did not return messages left on their voice mail Thursday.

Not having run far, it’ll be interesting to see whether local scammers (all of which are likely to be ex-TelexFree pimps) are held accountable for the schemes Massachusetts operations.
Certainly the scam appearing to based out Europe is going to present its challenges for Galvin’s office.
When the Massachusetts Security Division effectively shut down Wings Network in the US in May, offshore management pulled the plug and “suspended business operations”.

The Wings Network scam remains shuttered today, it’s offshore owners still at large.
Stay tuned…

Read More

SwissGolden Review: 220 – 9850 EUR gold matrix scheme

There is no information on the SwissGolden website indicating who owns or runs the business.
The SwissGolden website domain (“swissgolden.com”) was registered on the 22nd of May 2012, with the registration simply listing the company’s name as the domain owner.
An address in London, England is also provided, however this is a virtual mailing address provided by Regus (£59 a month).
Meanwhile in the SwissGolden service agreement, the company claims to be registered in the British Virgin Islands (a known tax-haven).
As always, if a MLM company is not openly upfront about who is running or owns it, think long and hard about joining and/or handing over any money.

The SwissGolden Product Line

The SwissGolden website has a “WebShop” featuring “gold ingots” ranging in price from 42 to 3129 EUR.
If you try to add any of the products to your shopping cart however, nothing happens.
There’s a “to order” button at the bottom of the page, however if you click that the WebShop demands a SwissGolden affiliate ID.
For all intents and purposes it appears SwissGolden do not sell anything at a retail level.

The SwissGolden Compensation Plan

The SwissGolden compensation plan revolves around affiliate purchasing positions in four matrix levels.
An additional points-based performance bonus is also offered.

Matrix Commissions

The SwissGolden compensation plan revolves around affiliates purchasing positions in a series of reverse 2×2 matrices.
A 2×2 matrix places an affiliate at the top of the matrix, with two positions directly under them (level 1):

Under these two positions another two positions are created each, with these positions making up the second level of the matrix. In total there are six positions to be filled.
Positions in the matrices are filled via the purchasing of positions by SiwssGolden affiliates.
Once all positions in a matrix are filled, SwissGolden pay the affiliate who holds the top position (the pay position) a commission. At this point the top position cycles out, and the two positions on level 2 form the start of two new matrices.
This leaves four positions empty in both of the two new matrices, which are then required to be filled before the pay position earns a commission again.
As mentioned previously, there are four matrices in the SwissGolden compensation plan. Here are their respective payouts:
Preliminary
The Preliminary matrix is the first of the four, with positions costing 220 EUR each.
Once all six positions in a Preliminary matrix are filled, the pay position is paid 72 EUR and cycled into the bottom of a Main matrix.
Main
The Main matrix functions the same as the Preliminary matrices, with the exception that new positions are fed into the bottom of Main matrices via cycled Preliminary matrix positions.
An affiliate can also purchase additional position in a Main matrix for 720 EUR.
A Main matrix position is able to cycle through a Main matrix up to three times, paying out 1890 EUR the first and second times and then 2520 the third time (total payout is 7000 EUR).
Note that if an affiliate’s position cycles into a VIP position at this point, they will be charged 2800 EUR (the cost of the third cycle payout).
VIP
VIP matrix positions must be purchased for 2800 EUR.
VIP matrix positions follow the same three cycle formula as the Main matrices, paying out 7425 EUR on the first and second cycles and then 9900 EUR on the third cycle.
Note that if an affiliate’s position cycles into a VIP Plus position at this point, they will be charged 9850 EUR (subtracted from the third cycle payout).
VIP Plus
VIP Plus matrix positions cost 9850 EUR and once again follow the three cycle formula. The first and second cycles pay out 26,460 EUR and the third 35,280 EUR.

Recruitment Requirements

Note that the above commission payouts are only applicable if an affiliate cycles out of a matrix with two personally recruited affiliates holding positions in the matrix.
If this is not the case, then the following cycle commission amounts are instead paid out:

• Preliminary – 200 EUR
• Main – 700 EUR
• VIP – 2750 EUR
• VIP Plus – 9800 EUR

For the Main, VIP and VIP Plus matrices, it’s unclear whether or not positions that cycle out without 2 recruited affiliate position in the matrix run the full three cycles.

Leadership Bonus

The Leadership Bonus is funded with 10% of every matrix cycle commission payout. In the interests if simplicity, I’ve already deducted the 10% from all the quoted cycle commission payouts above.
The Leadership Bonus is a points based bonus, with an affiliate generating points each time they cycle out of one of SwissGolden’s matrices.
To determine how many points an affiliate is awarded when one of their positions cycles, the amount paid out is divided by 500.
Eg. If an affiliate position cycles out of a Main matrix for the first time, they are paid 1890 EUR. 1890 divided by 500 is 3.78.
The amount of points allocated is then paid out using a level system, with an affiliate’s total accumulated points dictating the EUR multiplier used to determine the Leadership Bonus paid out on each cycle:

• 1 to 99 points = 15 EUR per point
• 100 to 299 points = 20 EUR per point
• 300 to 999 points = 25 EUR per point
• 1000 to 2499 points = 30 EUR per point
• 2500 to 4999 points = 35 EUR per point
• 5000 to 9999 points = 40 EUR per point
• 10,000 to 24,999 points = 43 EUR per point
• 25,000 to 49,999 points = 45 EUR per point
• 50,000 to 99,999 points = 47 EUR per point
• 100,000 to 199,999 points = 49 EUR per point
• 200,000 or more points = 50 EUR per point

Using the points generated in the above example, and assuming it is an affiliate’s first cycle, they have a total 3.75 points with 3.75 points paid out.
This equates to a 56.7 EUR commission (3.78 * 15).
If the affiliate in the example had 50,000, the same 3.78 points would result in a 177.66 EUR bonus.
Note that in order to qualify for the Leadership Bonus, a SwissGolden affiliate must cycle out of at least one Main matrix. So too must two of their personally recruited affiliates and two of their personally recruited affiliates each.

Joining SwissGolden

Affiliate membership to SwissGolden appears to be free, however affiliates must purchase a matrix position in order to earn commissions.
This makes the defacto cost of SwissGolden affiliate membership at between 220 EUR (Preliminary) to 9850 EUR (VIP Plus).
Any additional matrix positions will increase the cost of affiliate membership.

Conclusion

As with all the gold schemes running out of Europe, the SwissGolden compensation plan is a soup of terms like “tables” and “orders”. The company does it’s best to present an outwardly complex compensation plan, merged together with somewhat legitimate sounding terminology.
In effect, SwissGolden is no different to your standard matrix-driven Ponzi pyramid hybrid scheme.
Affiliates sign up and buy matrix positions. One enough new matrix have been purchased, either directly or indirectly, they get paid.
In this sense SwissGolden functions like a Ponzi scheme, with an affiliate’s matrix position qualifying as the investment.
The recruitment requirements to earn the full ROI (matrix cycle commission) and Leadership Bonus introduce a pyramid scheme layer to the scheme (hence it’s a hybrid).
The Leadership Bonus serves merely as a recruitment incentive, requiring a huge amount of recruitment to first qualify (if all positions cycle in from the Preliminary matrix level), and then directly paying affiliates based on the total number of cycles they have (requires recruitment and/or investment in positions).
As is usual with European gold scams, the gold component of the scheme is irrelevant. All funds taken in by SwissGolden are cash, and similarly commissions paid out are the same.
To create the illusion of legitimacy, the standard gold storage and postage of gold options that are typical of these schemes are offered.
The gold storage sees SwissGolden take affiliate funds from their backoffice and purchase golf with it. Up until that point there is no gold purchased, with an affiliate’s funds used to pay off existing investors who have cycled out of matrices before them.
At this point an affiliate can pay a storage fee of 0.1% of the value of the gold each month, or opt to have it sent to them.
Again it’s important to note that while gold may indeed by purchased at this point, it’s only after the Ponzi/pyramid scheme business model has paid out.
The facade presented to affiliates is that gold is being presented from the get go, but that’s obviously not the case (or SwissGolden would not have any money to pay matrix cycles with).
With nobody in their right mind opting to have gold sent to them (prohibitive shipping fees), the third option is to simply withdraw SwissGolden commissions as cash. And thus the standard matrix-driven Ponzi pyramid hybrid scheme circle is complete.
As with all Ponzi pyramid hybrids, recruitment slows down and affiliates stop purchasing matrix positions, said matrices will begin to stall. Once enough matrices have stalled the scheme collapses.
Those with funds trapped in matrices are unable to cycle out, and the admin does a runner.
And in the case of SwissGolden we don’t even know who the admin is, so that’s definitely something to keep in mind.
The absence of company ownership details on the SwissGolden website and registration in the BVI is not an oversight, it’s by design.

Read More

Leafit Review: Social network photo spam?

When I first began researching Leafit, I wasn’t sure if I was looking at a reincarnation of 2012s vLeaf Ponzi scheme or if it was something else altogether.
Digging up the archives, I headed over to vLeaf’s old website domain (“vleaf.com”), which confirmed that these two companies were indeed one and the same:

Why the vLeaf and Leaf International branding was abandoned I have no idea, but today the company is going by the name Leafit.
One possible reason is vLeaf’s business model:

Building on the traditional Ponzi scheme “buy advertising and earn a ROI” model, Leaf International introduces a retail offering to the recipe, throws in some online marketing tools and pairs it with a 3×9 pyramid scheme.
That vLeaf was destined to collapse was a given, however when exactly that happened is unclear.
The Leafit website domain (“leafit.com”) was first registered way back in 2006, however the domain details were only recently updated on July 27th. This is probably a good indication of whereabouts the domain was re-purposed to begin marketing Leafit as an opportunity.
That said, the Leafit website in its current state isn’t all that helpful:

What are we about? Well, we are creating a new type of social network that helps users actually make money from their content!
By posting content socially, like people do everyday on other social networks, Leaf It users will automatically be able to earn from what they post themselves, and even from what they share from others!

Hmm.

The website Leafit affiliates are pushing, “leafit.biz” is a bit more useful, offering up some basic information about the opportunity.
One pleasant change from vLeaf is that ownership of the company is now fully disclosed. Heading up Leafit is Founder and CEO Lawrence Sowell (right).
Somewhat curiously, on his LinkedIn profile Sowell only cites involvement with Leafit beginning January 2014.
Sowell’s Twitter meanwhile reveals he was most definitely involved in vLeaf:

Sowell’s background appears to be in marketing and promotion. Before vLeaf and Leafit, Sowell launched Get2Marketing in 2007.
Taken from Sowell’s Get2Marketing corporate bio:

Lawrence’s passion for marketing and promotions began when he was 18 years old in College. Little did he know, by the age of 22 he would have done 2 musical tours and over 20 promotional events with headline names like Nelly (hip hop), Sawyer Brown (country). 

Lawrence has since moved his passion to the internet where he is an expert at ad concept creation, branding strategy’s, website analysis, online and offline marketing, ad placement, and reporting.
This advertising background is probably what laid the foundation for the failed vLeaf Ponzi/pyramid hybrid attempt.
As far as MLM goes, I wasn’t able to find any involvement by Sowell on the affiliate or executive side. This indicates that vLeaf was Sowell’s first MLM venture.
Some of Sowell’s co-workers are also worth mentioning too. On Leafit’s Fundable investor page the company advises that it’s ‘interested in raising funds from accredited investors.‘
At least one investor seems to have jumped in, with Sowell noting in a July 16th update about a “Private Placement Memorandum” (PPM) that

The PPM has been launched after recently closing the Friends and Family Offering. On it’s first day one investor purchased stock in the amount of $50,000.
If you scroll down the main Leafit Fundable page, management is listed along with Leafit’s master associate, Vaughn Tarver.
Research reveals that Tarver was heavily involved in the penny-auction scheme BidXcel:

After being in the industry for 24-plus years, I would say in the last six months I have seen more change than I did in the previous 20 years combined.
BidXcel wasn’t as bad as some of the more obvious Ponzi scheme penny auctions that launched in the post Zeek Rewards era, but still permitted affiliates to directly invest and receive a ROI if they created dummy customer accounts.
Launched in September 2012, BidXcel ran out of new affiliate funds to pay off existing affiliate investors a few months later in March 2014. Abruptly and without forewarning or clear communication to its affiliate-base, BidXcel management did a runner and left those who had invested hanging.
Speaking of Zeek Rewards, also listed on the Fundable website is Mike Green. Green is credited as Leafit’s VP of Sales and lists his location as Spokane, Washington on his LinkedIn profile:

Green also currently appears to be one of the net-winners in the Zeek Rewards Ponzi scheme. Clawback litigation was recently launched against net-winners in the Zeek Rewards Ponzi scheme who failed to negotiate a settlement with the Receiver.

Green’s name appears on the Receivership’s list of net-winners who earned $1000 or more and refuse to return the stolen Ponzi funds they were paid back to the scheme’s victims.

Steve Heiman is named Leafit co-founder and COO, and is also co-owner of Sowell’s Get2Marketing company. MLM wise I’m not entirely sure but Heiman might be an ex-affiliate of StemTech International. Various replicated affiliate pages for a Steve Heiman in StemTech (affiliate ID: 1004901) are currently cached by Google (they are otherwise no longer publicly available).
Heiman’s LinkedIn profile also credits him with involvement in vLeaf.
As is clear from the above, Leafit’s management and master associate certainly have a colorful history. We know what’s attracted them as MLM marketers in the past, but has Leafit changed from vLeaf’s original advertising-based Ponzi points model?
Read on for a full review of the Leafit MLM business opportunity.

The Leafit Product Line

Leafit’s product appears to be a mobile app that enables users to post photos on third-party social networks.
Promotional material for the app mentions a “social network”, but whether or not this is a fully fledged social network or merely something integrated within the Leafit app is not clarified.
The idea behind the app appears to be the tagging of products in photos that users of the app upload to social networks.

When the Leafit app detects a product tagged in a photo, it then attaches an affiliate shopping link (from a third-party merchant) to the photo.
There’s no mention of any costs to the user, however there is a “free affiliate” option mentioned in the compensation plan. This indicates that basic usage of the app (along with single-level non-MLM commissions) will be free.

The Leafit Compensation Plan

Leafit’s compensation plan pays affiliates on the recruitment of new affiliates. If recruited affiliates continue to pay monthly membership fees, residual commissions are paid out via a matrix.
Commissions are also available on any product or service purchases made through Leafit’s app.

Recruitment Commissions

Leafit pays a direct commission on the recruitment of new affiliates, paid out down a maximum nine levels of recruitment.

• level 1 (personally recruited affiliates) – $50
• level 2 – $10
• level 3 -$5
• levels 4 to 9 – $3

How many levels of recruitment a Leafit affiliate can earn on is determined by how many affiliates they themselves have recruited:

• recruit 1 affiliate = earn on levels 1 to 3
• recruit 3 affiliates = earn on levels 1 to 6
• recruit 5 affiliates = earn on all 9 available levels

Residual Recruitment Commissions

Residual recruitment commissions in Leafit are paid out via a 3×9 matrix.
A 3×9 matrix places an affiliate at the top of a matrix, with three positions directly under them (level 1):

In turn, these three positions branch out into another three positions each (level 2), and so on and so forth down a total of 9 levels (29,523 positions in total).
Positions in the matrix are filled via affiliate recruitment, with commissions paid out of the monthly fees Leafit affiliates pay.
How much of the monthly affiliates fees are paid in commissions is determined by what level that affiliates sits on the matrix, in addition to how many affiliates the qualifying affiliate has personally recruited:

• recruit 1 affiliate and earn $2 on matrix levels 1 to 3
• recruit 3 affiliates and earn $2 on matrix levels 1 to 6
• recruit 5 affiliates and earn $2 on matrix levels 1 to 8 and $5 on level 9

Note that in order to satisfy the requirements to earn commissions, affiliates recruited must be paying their monthly membership fee (counted as active).

Matrix Commissions Match

Leafit affiliates are able to earn a matching bonus on any matrix earnings affiliates in their downline earn, payable down five levels of recruitment.
How many levels of recruitment a Leafit affiliate can earn a matrix match on depends on how many affiliates they recruited and the weekly sales volume they generate:

• Manager (recruit 3 affiliates and have a downline that has generated at least 600 points in sales volume) = a 5% match on level 1
• Director (recruit 5 affiliates (2 of which must be Managers) and have a downline that has generated at least 1500 points in sales volume) = 6% on level 1 and 5% on level 2
• Senior Director (recruit 10 affiliates (3 of which must be Directors) and have a downline that has generated at least 5000 points in sales volume) = 7% on level 1, 6% on level 2 and 5% on level 3
• Executive (recruit 15 affiliates (4 of which must be Senior Directors) and have a downline that has generated at least 25,000 points in sales volume) = 8% on level 1, 7% on level 2, 6% on level 3 and 5% on level 4
• Senior Executive (recruit 20 affiliates (3 of which must be Executives) and have a downline that has generated at least 200,000 points in sales volume) = 10% on levels 1 to 5

I believe sales volume solely includes monthly membership fees paid by affiliates. The example provided in the Leafit compensation plan states that the monthly $49 affiliate fee is equal to 49 sales volume points.

e-Commerce Commissions

When a product is sold through the Leafit app (via a tracked affiliate link embedded into a shared photo), Leafit pay out the affiliate who published the photo a percentage of the commission they receive from the third-party merchant who stocks the product or service sold.
This percentage is split between an affiliate and their downline as follows:

• free affiliates earn 10% of the commission the third-party merchant pays Leafit
• paid affiliates can earn from their own sales and that of their downline, at a rate of 10% on their personal sales and 5% on any sales made down 9 levels of recruitment

Joining Leafit

Paid affiliate membership to Leafit is $149 and then $49 a month.
Free affiliate membership is also available, however this excludes an affiliate from the MLM components of the Leafit compensation plan.

Conclusion

Leafit unfortunately isn’t all that different business-model wise to vLeaf, but before we get into the compensation plan let’s take a look at their “product”.
In the sense that Leafit is an MLM business opportunity, their app doesn’t really qualify as a product in and of itself. It doesn’t appear to cost anything and it simply tacks on an affiliate link provided by third-party vendors.
If we go even deeper into the app

when you post a photo to Leafit, your friends and followers on Facebook, Twitter, Instagram and Pinterest will see it, too. 
When your friend clicks on an item in a photo you’ve posted, they’ll be automatically directed to whichever one of over 18,000 retailers has that item at the lowest price.
With just one more click of a button, they can buy the item, and once they do, a portion of the profit will come back to you!
Well gee-whiz. If only affiliate marketing was that easy.
The hell do you need Leafit for? Just sign yourself up to Amazon and start spamming photos with affiliate links attached yourself.
Chances are though you’re going to make squat. I’m not the biggest of social network users but I’ve certainly got better things to do than stare at photos of products someone I’m connected to spams my way.
And with the tacking of an affiliate link breaching into advertising territory and the receiving of published photos being entirely unsolicited, make no mistake – this is spam.
Leafit try to counter this by dangling the viral carrot infront of prospective affiliates.
The example provided in the Leafit app presentation is a photo of a running shoe:

Yeah look, nobody in their right mind is going to sharing your photo of a shoe.
And if you think it’s going to “go viral”… bloody hell.
I mean cmon, has a product photo with an attached affiliate link ever gone viral in the history of the internet? Contrary to what Leafit project would have you believe, affiliate marketing on social networks is not cake.
And this is where the wheels come off the wagon.
Sure Leafit pay out commissions if anybody actually does buy anything through the app, but it’s a token add-on.
Here’s the core of the business:
Sign up and pay your $149 participation fee. Start recruiting others and get them to pay their $149 too. Each time this happens you get paid.
Want to get paid more and down more levels of recruitment? Simply recruit more affiliates.
And as long as everyone continues to pay their $49 a month participation fee, everybody gets paid.

Other than pooling funds each month so that Leafit can pay out those who recruit the most, what Leafit affiliates are paying $149 and then $49 a month for is a mystery. The app is free so it’s certainly not that. Nor is it the attaching of affiliate links to photos backend, because free affiliates have access to that too.
A pyramid scheme by any other name?
Leafit would certainly appear so. And in that sense, all we’ve got here is the abandoning of the Ponzi advertising side of vLeaf, with the pyramid scheme aspect left intact.

A company name-change and the mashing of said pyramid scheme with a rather useless social network spam marketing app – and bingbaddaboom;  Here we are.
Leafit affiliates can totally ignore the app and just focus on the recruitment of affiliates and getting paid out of their monthly membership fees. And while that’s happening, absolutely nothing is being sold to retail customers.
Or as Leafit put it in their policies and procedures:

Leaf It is built upon a foundation of honesty, mutual respect, fairness and ethical business standards. Leaf It recognizes the importance of creating for its customers and distributors a business environment that fosters trust and integrity.
Riiiiiiiiiiight.

Read More

ISN Coins Compensation Plan Review v2.0: Autoship redux

Last month I was contacted by ISN Coins founder and CEO Matt Barkes:

My name is Matt Barkes. I’m one of the founders of ISN. I apprecite (sic) you taking the time to evaluation ISN, however almost everything you have written is out dated.
After hiring Kevin Thompson as our MLM attorney we’ve made many changes to better the company for our members.
This being the case I respectfully request that you either modify the information to to (sic) reflect ISN currently or remove the blog.

I first reviewed ISN Coins back in 2012, so it wasn’t surprising to learn that the business might have changed since then.
Today we take a look at ISN Coins as it stands in 2014, read on for the review.

The ISN Coins Product Line

ISN Coins market numismatic coins and bullion bars, with the company’s online store appearing to have undergone significant upgrade since 2012.
Back then there wasn’t really much on there other than some MS69 Silver Eagle coins going for $59.
Today the ISN Coins webstore offers a bunch of numismatic coins from around the world. The “top seller” listed coin on the website is a “Random Date 1/10 oz Gold Eagles NGC/PCGS MS70″ going for $254.

The ISN Coins Compensation Plan

The ISN compensation plan comes in at a whopping thirty three pages. “Core commissions” are paid out through a unilevel, however the way this is explained is confusing and tends to jump all over the place.
As such I’ve tried to present ISN’s compensation plan below in a more structured manner. In addition to upfront commissions (retail and autoship), two bonus pools are also available for higher ranked ISN affiliates.

Retail Commissions

Retail commissions are offered on all coin purchases through ISN Coins replicated storefronts (including discounted preferred customer orders).
Retail commissions are paid out on single product orders that cost less than $999 at 4%. Anything over $999 is paid out at 2%

Bullion Commissions

Any bullion sold through an ISN Coins replicated storefronts attracts a direct retail commission.
Bullion commissions are paid out at a rate of ‘$1 per ounce of silver bullion and $1 per gram of gold bullion‘ purchased.

Opening Order Bonus

The Opening Order Bonus pays out a commission on coin orders made by ISN affiliates (after they’ve joined), within their first 30 days of affiliate membership.
The Opening Order Bonus paid up four levels of recruitment:

• recruiting affiliate (level 1) is paid 6%
• the affiliate who recruited them (level 2) is paid 2%
• the affiliate who recruited them (level 3) is paid 2% and
• the affiliate who recruited them (level 4) is paid 1%

ISN Coins Affiliate Membership Ranks

There are fourteen affiliate membership ranks within the ISN Coins compensation plan.
Along with their respective qualification criteria, they are as follows:

• Manager – commissions qualified affiliate (100 PV a month)
• Director – recruit at least two affiliates, who each generate $100 a month in volume and have a total monthly downline volume of $300
• Silver Director - recruit at least two affiliates, who each generate $100 a month in volume and have a total monthly downline volume of $3000
• Gold Director - recruit at least three affiliates, who each generate $100 a month in volume and have a total monthly downline volume of $12,000
• Platinum Director - recruit at least three affiliates, who each generate $100 a month in volume and have a total monthly downline volume of $50,000
• Executive - recruit at least three affiliates, who each generate $100 a month in volume and have a total monthly downline volume of $100,000
• One Star Executive – as per above and have at least one Executive ranked affiliate in any one unilevel leg
• Two Star Executive - as per Executive and have at least two Executive ranked affiliate in two individual unilevel legs
• Three Star Executive - as per Executiveand have at least three Executive ranked affiliates spread out over at least three individual unilevel legs
• Four Star Executive - as per Executive and have at least four Executive ranked affiliates spread out over at least three individual unilevel legs
• Five Star Executive - as above and have at least five Executive ranked affiliates spread out over at least three individual unilevel legs
• Silver Executive – qualify as an Executive or above and have at least one Three Star Executive or higher ranked affiliate in three individual unilevel legs
• Gold Executive – qualify as an Executive or above and have at least one Five Star Executive or higher ranked affiliate in three individual unilevel legs
• Platinum Executive – qualify as an Executive or above and have at least five Five Star Executive or higher ranked affiliates spread out over at least three individual unilevel legs

Residual Commissions

Residual commissions in ISN Coins are paid out using a unilevel compensation structure.
A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1):

 

In turn, if any level 1 affiliates go on to recruit new affiliates of their own, they are placed on level 2 of the original affiliate’s unilevel team. If any level 2 affiliates recruit new affiliates of their own, they are placed on level 3 and so on and so forth down a theoretical infinite number of levels.
Standard residual commissions paid out via the unilevel are capped by ISN at eight levels. But how volume is generated is a bit murky.
In their compensation plan ISN state

On sales where customer commissions apply, the full core commission distribution, most commonly 3% of the purchase price, is paid proportionately through each level of the (unilevel).
This would suggest that everything purchasable by an affiliate or retail customer, excluding the Opening Order Bonus and bullion sales, generates volume into the unilevel at a rate of ~3% of the cost price.
The comp plan does mention that single item purchases over $1000 are generate 1.5% of the cost-price in volume, but everything else appears to be 3%.
What is absent is an explanation of how much per level is paid out. The Autoship commissions are clarified below, but as for how everything else is paid out through the unilevel – that information is absent.

Finally, note that at the Executive rank an affiliate is able to earn beyond eight levels through an Executive Depth Bonus. This bonus continues the 3%/1.5% commission beyond the eighth unilevel level, paying out until two Executive ranked affiliates are found in a unilevel leg.
Once a second Executive ranked affiliate is found beyond the first eight unilevel levels, the Executive Depth Bonus will be capped eight levels deeper than the level this affiliate was found on.
Note that the Executive ranked affiliates must be found in each individual leg, with each unilevel leg considered independently of the others. If no second Executive ranked affiliate is found, then the Executive Depth Bonus pays out till the end of the unilevel leg.

Autoship Commissions

Referred to as an “Advantage Bonus”, ISN pay out a commission each time a customer or affiliate signs up for a monthly autoship order.
The affiliate whose customer it is or who recruits the affiliate signing up for autoship is paid $20.
A residual $3.75 commission is paid on autoships sold by an affiliate’s downline, via a unilevel compensation structure, as follows:

• Manager – levels 1 to 4
• Director – levels 1 to 6
• Silver Director – levels 1 to 7
• Gold Director or higher – levels 1 to 8

Residual commissions are also paid out on autoship orders, paying out $6.25 per order using the same unilevel qualification requirements above.
Note that an affiliate can earn deeper than eight levels via the Executive Depth Bonus (see unilevel commissions).
Autoship commissions paid out via the Executive Depth Bonus reduce the $3.75 and $6.25 payments to a flat $2 (both initial and monthly residual).

Collector Pack Bonus

The sale of a Collector Pack generates a $75 commission which is paid to either the affiliate who made the sale. Their upline can also earn a commission as the Collector Pack Bonus payout is determined by an affiliate’s membership rank.

• Manager – $25
• Director – $50
• Silver Director – $60
• Gold Director – $65
• Platinum Director – $70
• Executive – $75

A maximum of $75 is paid out, meaning that if the affiliate who makes the sale is at a rank lower than Executive, the system will search the upline for higher ranked affiliates to pay the rest of the $75 available to. Once an Executive is eventually found, whatever remains payable is paid out.
Eg. If a Silver Director sells a Collector Pack, they are paid $60. If their immediate upline is a Platinum Director, they receive $10. $5 remains to be paid out so the system will then continue to search for an Executive ranked affiliate to pay the remainder of the bonus out to.
A residual second level commission of $5 is also paid out, with an affiliate needing to be at the Silver Director or higher rank to qualify. This second level commission is only paid out once to the first available Silver Director or higher ranked affiliate found in the upline after the entirety of the first level $75 commission has been paid out.

VIP Pool

ISN’s VIP Pool is ‘made up of 2%of the entire company’s business volume‘, excluding any orders made during the Opening Order Bonus period, and is paid out to affiliates via shares.
ISN Coins affiliates earn shares in the pool based on their affiliate membership rank:

• Active Manager – 1 share
• Active Director – 10 shares
• Active Silver Director – 30 shares
• Active Gold Director – 50 shares
• Active Platinum – 70 shares
• Active Executive – 90 shares

If an affiliate qualifies as an “ISN All Star”, each share they have is worth double its value (ie. if they have 30 shares, it’s equivalent to 60).
To qualify as an ISN All Star, an affiliate must qualify at the Director affiliate rank within 30 days of joining the company.
ISN recommends affiliates do this by recruiting two affiliates and getting them to spend at least $300 (combined) when they sign up:

Leaders Pool

Similar to the VIP Pool, the Leaders Pool is made up of 2% of ISN’s company-wide business volume.
Available to Platinum Director and Executive affiliates, the Leaders Pool (split 1% between Platinum Directors and Executives), is also paid out via shares.
Qualified affiliates earn shares in the pools according to the ranks of recruited affiliates in their downline:

• a Director ranked affiliate in at least three individual unilevel legs = 1 share
• a Silver Director ranked affiliate in at least three individual unievel legs = 3 shares
• a Gold Director ranked affiliate in at least three individual legs = 5 shares
• a Platinum Director ranked affiliate in at least three individual legs = 7 shares
• an Executive ranked affiliate in at least three individual legs = 10 shares

Note that an Executive’s shares count for a share of both bonus pools. And as with the VIP pool, if an ISN affiliate qualifies as an ISN All Star, their shares receive double value.

Car Bonus

If an ISN affiliate qualifies and maintains a rank of Gold Director or higher for two months, they qualify for a $600 a month car bonus.
The car offered is a ‘white, silver or black ISN branded Mercedez-Benz’.
Note that if an ISN affiliate doesn’t wish to purchase a car, they can elect for a $400 monthly cash bonus instead.

Joining ISN Coins

Basic affiliate membership to ISN Coins is $39 upfront and then $19.95 a month.
An optional Collector Pack for $199 is also available. This pack is in addition to the basic affiliate cost, and comes with 1 silver coin, 1 silver bullion bar, affiliate training and “customer vouchers”.
Monthly autoship is also pushed pretty heavily which, if an affiliate signs up for it, results in an additional $104.95 a month cost.

Conclusion

When I first reviewed ISN Coins I was heavily critical of the fact that the business model lead itself to the recruitment of new affiliates and putting them on autoship.
Granted ISN have made a better effort in stocking their online store and changing up their compensation plan, but unfortunately the underlying business model appears to remain the same.
We can start our analysis by taking a look at three random coins offered on the ISN Coins webstore (“isnmoderncoins.com”).
The first coin appears on the ISN Modern Coins homepage as a “2014-P Aus Wedge Tailed Silver Eagle Mercanti Signed PCGS MS70″, and it’s listed for $119:

 I punched the name of the coin into Google and the second result (Modern Coin Mart) has the same coin listed for $99:

Next I clicked Chinese Coins and a “2014 China 1 oz. .999 Fine Silver Panda 10 Yuan PCGS MS70 Mint State 70″ coin popped up for $79.
Modern Coin Mart have the same coin listed for $59.95:
 

For my last comparison I clicked “5 Oz ATB Coins” (I don’t even know what that means), and a “2014 5oz. American the Beautiful Shenandoah National Park
NGC SP70 ER” coin popped up for $262.
Modern Coin Mark again wins out offering the same coin for $239:

Seriously, what am I missing here?
I’m not going to pretend like I know anything about these coins but consistently ISN Coin’s prices would indicate little to no retail value. Who, other than affiliates, are buying coins from ISN at inflated prices?
And that brings us to the compensation plan.
Despite the apparent lack of retail appeal, the plan does pay out retail commissions on coin purchases and retail autoship, so that’s good.
But fat lot of good the offering is if nobody is signing up for it. And that leaves us with the problem we had before, a business model tailored around recruiting affiliates and signing them up on autoship.
Mysteriously absent from ISN’s compensation is the breakdown of percentages paid out on non-autoship volume through the unilevel. And don’t forget, ISN call this core commissions…
What is provided though are explicit dollar values for autoship order payouts per level, including the Executive Depth Bonus.
Sort of gives away what’s truly being pushed here, doesn’t it.
Still not convinced? From the ISN compensation plan:
What would be one of my first goals when I become an ISN Business Pro (affiliate)? To become an ISN “All-Star”.
As mentioned in the compensation plan breakdown, ISN’s recommended path for that is the recruitment of 2 affiliates and getting them to spend $300 combined. Two affiliate memberships + a Collector Pack each easily covers that.
And it gets even more obvious when the unilevel example provided by ISN exclusively focuses on autoship volume (ignoring everything else):

Other revealing factors are that in order to qualify for commissions, ISN affiliates must generate 100 PV a month in sales. In the event that retail customers aren’t interested in paying above-average prices for ISN’s coins, an affiliate can self-purchase their way to commission qualification.
ISN’s monthly autoship costs $104.95, which conveniently and obviously entirely be design generates 125 PV.
And for that, you don’t even know what you’re getting:

Each month you’ll receive an NGC graded MS-69 1oz Silver World Coin from our rotation of beautiful Government Struck World Coins.
Coins from somewhere around the world… that are supposedly part of ISN’s collection. Riiiiiiiiiiight.
Good luck trying to convince non-affiliates to sign up for monthly random coins they know nothing about.
Even the affiliate rank requirements are rigged around autoship, never once requiring retail volume and only requiring recruited affiliates to generate 100 PV a month (autoship).

If you’re still not convinced this is the same recruitment + autoship model I reviewed back in 2012, just ask the person recruiting you how much retail volume they were paid out on the last month.
Then ask them how much they made off affiliate autoship orders. I’d be extremely surprised if it was anything less than a gargantuan bias towards affiliate autoship volume.
And the Collector Bonus, way to just reword the recruitment commissions from the previous model. If  only affiliates are purchasing the Collector Pack (and I don’t see why retail customers would need customer “offer” coupons or marketing training), then this is pretty much a defacto recruitment commission.
You sign up affiliates, get them to purchase a Collector Pack and then get paid on it.
Finally, can someone explain to me why there’s fourteen ISN affiliate membership ranks when most of them have nothing to do with the compensation plan? Surely these could have been cut down to simplify the plan somewhat.
All in all if ISN’s coins were remotely competitive at a retail level then one might argue that a retail market is possible. Based on the coins I checked though (completely at random), this does not appear to be the case.
Thus all you’re left with is a re-incarnation of the problematic recruitment and autoship combination business model ISN were using before.
Granted this time around it’s not as explicitly obvious as before, but if only affiliates are buying coins (autoship or otherwise), then you’re pretty much looking at the exact same flow of money through the company.

Read More